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What’s Wrong with Keynesian Economic Theory?

Edited by Steven Kates, Associate Professor of Economics, School of Economics, Finance and Marketing, RMIT University, Melbourne, Australia
Possibly the strangest phenomenon in all of economics is the absence of a long tradition of criticism focused on Keynesian economic theory. Keynesian demand management has been at the centre of some of the worst economic outcomes in history, from the great stagflation of the 1970s to the lost decade and more in Japan following the expenditure program of the 1990s. And once again, following the Global Financial Crisis, it is incontrovertible that no stimulus program in any part of the world has been a success, each one having been abandoned as conditions deteriorated under the weight of public sector spending. This book brings together some of the most vocal critics of Keynesian economics. Each author attempts to explain what is wrong with Keynesian theory in ways that can be understood by those seeking guidance on where to turn for a more accurate explanation of the business cycle and on what to do when recessions occur.
Extent: 288 pp
Hardback Price: $145.00 Web: $130.50
Publication Date: 2016
ISBN: 978 1 78536 373 3
Availability: In Stock
Paperback Price: $55.00 Web: $44.00
Publication Date: 2016
ISBN: 978 1 78536 375 7
Availability: In Stock
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  • Economics and Finance
  • Austrian Economics
  • History of Economic Thought
  • Post-Keynesian Economics
  • Teaching Economics
One of the most striking phenomena in all of economics is the absence of a deep tradition of criticism focused on Keynesian economic theory. There have been critics but they are few and far between, even though Keynesian demand management has been at the centre of some of the worst economic outcomes in history, from the great stagflation of the 1970s to the twenty-year ‘lost decade’ in Japan that has been ongoing since the 1990s, and now, once again, the dismal recoveries that have followed the Global Financial Crisis. This book brings together some of the most vocal critics of Keynesian economics of the present time.
 
Each author attempts to explain what is wrong with Keynesian theory for those seeking guidance on where to turn for a more accurate explanation of the business cycle and what to do when recessions occur. The contributions are by scholars from a wide number of schools of economics, which include but are not restricted to Austrian, monetarist and classical perspectives. Written not just for economists, this accessible book is one of the few anti-Keynesian texts available and explains the inability of public spending and lower interest rates to have restored robust economic growth and full employment after the GFC.
 
The collection offers an antidote to contemporary macroeconomic theory. It is an essential text for anyone wishing to understand why no stimulus has been able to bring recovery to any economy in which it has been tried.
Contributors: P. Boettke, P.L. Bylund, T. Congdon, R.M. Ebeling, R.W. Garrison, S. Horwitz, S. Kates, A. Kling, A.B. Laffer, P. Newman, G. Reisman, D. Simpson, M. Skousen, P. Smith
Contents:

Introduction

1. The Keynesian Liquidity Trap: An Austrian Critique
Peter Boettke and Patrick Newman

2. What the Entrepreneurial Problem Reveals about Keynesian Macroeconomics
Per L. Bylund

3. A Critique of Two Key Concepts in Keynesian Textbooks
Tim Congdon

4. The Misdirection of Keynesian Aggregates for Understanding Monetary and Cyclical Processes
Richard M. Ebeling

5. Cycles and Slumps in an Overly Aggregated Theoretical Framework
Roger W. Garrison

6. The Problems with Keynesianism: A View from Austrian Capital Theory
Steven Horwitz

7. The Dangers of Keynesian Economics
Steven Kates

8. The Problem of Keynesian Aggregation
Arnold Kling

9. What’s Wrong with Keynesian Economists?
Arthur B. Laffer

10. Capital, Saving and Employment
George Reisman

11. What’s Wrong With Keynesian Economics?
David Simpson

12. Move Over Keynes: Replacing Keynesianism with a Better Model
Mark Skousen

13. The Conclusive Fault Line in Keynesian Economics
Peter Smith

Index